For the Quarter Ending June 2023
North America
In the 2nd Quarter of 2023, the Polyolefin Elastomer (POE) pricing trend showed mixed sentiment in the North American market. After a sharp surge in April, POE prices decreased steadily for the next two months. In the USA market, POE prices showed a bullish trend in April 2023, supported by improved buying sentiment among end users. In the domestic market, there was an increase in demand from the automotive industry from both domestic and foreign markets. In addition, the ports of Long Beach and Los Angeles faced a labor shortage and dockworkers' strike, which shut down the ports and restricted the supply in the domestic market. In the last two months of the 2nd Quarter, POE prices in the domestic market remained subdued. The operating rates of the downstream automotive industries remained moderate while the demand support of POE remained average. The supply chain pressure eased, and there was an active flow of goods. The market was also dealing with abundant inventories, which contributed to the decrease in the POE prices.
APAC
In Asia-Pacific, Polyolefin Elastomer prices rose steadily in the second quarter of 2023. Prices rose sharply during the quarter, with the most noticeable improvement seen early in the quarter. Increased downstream demand pushed Polyolefin Elastomer prices higher in April. Demand for automobiles increased during the month, surging demand for polyolefin elastomers. The use of polyolefin elastomers also increased significantly in May due to growth in the pharmaceutical and packaging industries. The significant growth in these areas has increased the demand for polyolefin elastomers and increased their market value. In June, once again, the prices of Polyolefin Elastomers in Asia rose significantly due to increased demand in domestic and overseas markets. Furthermore, in June, the overwhelming market performance of the Asian auto industry this week has led to a surge in POE consumption in the global market, followed by an increase in market demand and an increase in its value. However, Singapore's Purchasing Managers Index (PMI) has recently hovered above 50, suggesting that the country's growing industrial activity is somehow stabilizing the market and reducing excessive volatility.
Europe
In Europe, the price of Polyolefin Elastomer followed a mixed pattern. Initially, prices rose in Spain due to an increase in global demand but decreased significantly in the last month of the quarter. The Spanish market saw an increase in Polyolefin Elastomer prices in the first two months of the quarter, driven by improved offtake and stable supply. Domestic operating rates improved, reflecting an increase in consumption from both domestic and international markets, as well as an increase in demand from the automotive industries. Additionally, market participants reported a sharp increase in inquiries from end-users, which further influenced the market trend of Polyolefin Elastomers. Reports suggest that the prices of raw materials, particularly Ethylene, decreased significantly in Europe, resulting in a significant decrease in the production costs for Polyolefin Elastomer, thus decreasing the market value of the material. Furthermore, in May, new order inflows decreased significantly, the sharpest decrease in the last six months. All these factors contributed to the decrease in Polyolefin Elastomer prices.
For the Quarter Ending March 2023
North America
Prices of Polyolefin Elastomer (POE) have continued to drop in the USA market during the first quarter of 2023 owing to sluggish buying sentiments and ample material availability in the market. Overall, POE demand from the automotive and construction industries has been weak, and there were limited instances of new orders inquired by the end-users, which resulted in bearish pricing sentiment in the domestic market. The sluggishness in the market can also be observed in the below-par performance of the manufacturing industry in the US market. In addition, operating rates have been stable in the US market, resulting in ample inventory levels in the domestic market as well as in the ports. Moreover, market participants reported that the latest banking crisis in the USA has further deteriorated the market growth of many commodities, including POE. Thus, prices of POE Octene-based FOB New Orleans were settled at USD 3403/MT with a month-on-month decrement of 3.5% during March 2023.
Asia- Pacific
Polyolefin Elastomer (POE) has witnessed a downward trend in China during the first quarter of 2023 on account of a sluggish buying trend among the end-users. Market participants reported that the automotive industry, which was trying to revive in Asia- Pacific, soon started showcasing a downfall as the destocking of the automotive inventories started in China; thus, the demand for POE dropped in the domestic market. In addition, operating rates have remained stable in China market while the steady imports from neighboring South Korea and Singapore have led to ample material available on the Chinese ports or shores. The surplus inventories of the product and slowdown in downstream demand have encouraged the manufacturer to revise their negative price quotation. Consequently, prices of POE Octene-based CFR Shanghai were settled at USD 3123/MT during March 2023.
Europe
Polyolefin Elastomer (POE) prices have decreased in the European market throughout the first quarter of 2023 due to dull buying sentiments and ample supplies in the region. POE imports from Asia improved on European shores as the freight charges deteriorated sharply. In addition, upstream natural gas prices stabilized amid plenty of availability in the European market which softened the production cost of several commodities, including POE. In addition, due to high-interest rates and inflation, the demand for POE from the construction and automotive industry was subdued. There were no new orders from end-use industries, so the product ended up in stock. In addition, the market perceived a wait-and-see attitude. Furthermore, Germany, Europe’s largest car producer, and consumer, recorded a decline in growth of 2.6% during February, as reported by market participants. Thus, in Germany, prices of POE Octene-based FD Hamburg were assessed at USD 3249/MT during March 2023.
The prices of Polyolefin Elastomer assorted in the North American market throughout the fourth quarter of 2022. Fluctuating demand from the automotive industry and for films and sheets from the agriculture sector pulled back the prices of Polyolefin Elastomers within the regional market. The product inventories were varying with the traders and the suppliers due to changing consumption patterns affecting the market sentiments. The energy and production costs eased during the quarter, impacting the prices of Polyolefin Elastomer. The area's supply chain was sufficient due to the considerable number of shipments witnessed in the market during that time, which led to higher product availability.
The product's low-price trend in the Asian market was driven by good demand, less supply, and weakening spot prices abroad during the fourth quarter of 2022. The traders have noticed increased margin deterioration as well. The area's supply chain was sufficient due to the considerable number of shipments witnessed in the market during that time, which led to higher product availability. The product's price was decreased from the pressure of weakening costs and the product's plummeting demand from downstream automotive. Due to lower marginal costs from exporting nations like South Korea and Thailand, a price decrease followed. The Asia Pacific region's fall in freight costs also influenced the exports to the international market.
Producers of Polyolefin Elastomers continue to struggle to gain orders in the European market via share shifting rather than simply slow production to rebalance demand, further decreasing the price margins. The feedstock cost fluctuated throughout the fourth quarter of 2022, further disrupting production rates. Suppliers and traders could maintain volatile inventories of Polyolefin Elastomers in the market. As demand from the downstream market fluctuated, traders and suppliers witnessed a change in their stock. Prices also rose due to fluctuations in the prices of feedstocks (Ethylene), and consumption levels remained high. There was a further expansion in Polyolefin Elastomer production rates and a variation in demand for the product.
